Jargon buster: R - Z
Real Estate Investment Trusts (REITs) A type of property investment fund that is exempt from various taxes and freely traded on the stock exchange.
Registered Nursing Care Contribution (RNCC) The money paid by the NHS for the nursing care component of a person's care package in a nursing home.
Rent a Room scheme If you rent a room and get less than £4,250 total gross income from the rental in a year then, subject to certain conditions, the income is exempt from Income Tax. If you get more than the £4,250 limit from letting the room(s), you can either pay tax on the profit from the letting, which will be worked out in the normal way, or opt for the Rent a Room relief and only pay Income Tax on the amount above £4,250.
Residential care home A home for people who can no longer live in their own home, even with support from home care services, or no longer wish to stay there.
Retail Prices Index (RPI) Measures the change in a wide basket of retail goods and services. Significantly, the RPI includes the cost of housing.
Risk Some investments carry more risk than others. Investments in shares are more risky than savings accounts because there is a higher chance of you losing money. As compensation, more risky investments usually offer potentially higher returns.
Rules of intestacy If you have not left a valid Will, these rules will determine how your possessions are distributed after your death.
State Second Pension (S2P) Also known as the additional state pension, the S2P provides additional benefits for those in employment who face financial or other difficulties.
Savings bonds Typically, a safe and risk-free way to save money. They offer different options for how to invest your money with different payment options to choose from, depending on the provider. Savings bonds providers may also offer you the option of reinvesting the interest.
Savings accounts Accounts designed to hold cash assets, usually for a number of months or years, providing higher interest rates than a typical current account. They usually require a minimum investment amount and some require a notice period for withdrawals.
Section 47 assessment A form of needs assessment for community care services.
Sheltered accommodation Housing for the elderly and vulnerable that offers a degree of independent living combined with support, such as a resident warden.
Self-Invested Personal Pensions (SIPPs) A type of personal pension where you or your financial adviser takes responsibility for investment decisions relating to the fund.
Social fund funeral payment A one-off welfare payment to pay funeral expenses. You might have to repay some of it if the person who has died left any estate.
Stakeholder pension A personal pension that is regulated by the government to provide simplicity, transparency and value for money.
Stakeholder pension plans Stakeholder pensions are flexible, low-cost and value-for-money pensions. You can invest any amount up to the HM Revenue & Customs’ (HMRC) permitted maximum of £3,600 a year or your total earned income in each year, whichever the greater. This includes your contributions to company pensions and AVC schemes. They are available from birth, and give basic tax relief even to non-taxpayers.
State Earnings Related Pension Scheme (SERPS) The additional state pension scheme replaced by S2P in 2002, linking the amount of additional pension you received to the amount that you earned.
Stocks and shares The terms stocks and shares are essentially interchangeable. Both refer to parts of companies that can be bought and sold. If you own a share in a company, you own a part of that company, or you own some of that company's stock. Company shares are traded on the stock exchange.
Stock broker A professional who buys and sells stock and shares for clients. Only registered stock brokers can buy or sell shares on the stock exchanges.
Stock markets A largely virtual international market place – for example, the London Stock Exchange – where shares in companies are bought and sold.
Tariff income Is what the local authority calculates when determining your eligibility for long-term care funding. If your capital is between both the lower and upper limits, ie between £14,000 and £23,000 (2009/10), then they will make a calculation to determine your tariff income. This income is calculated on the basis of £1 a week for every £250 above the lower limit.
Tax credits The government makes payments to certain people such as people on low incomes, families and those caring for relatives.
Tax-efficient investing Investing to minimise the amount of tax paid. This could mean targeting investment opportunities that attract tax relief, for example, ISAs.
Tax exempt special savings accounts (TESSA) These accounts were withdrawn in 1999. They were initially created to encourage people to save. Providing they were held for five years, TESSAs allowed investors to take all interest earned on the deposit accounts tax-free. Those that matured after 5 April 1999 were rolled over into a TESSA-only ISA, so savers could continue to receive tax-free interest.
Tax relief Some investments attract tax relief on the income you use to invest (in the case of pension funds for example), or gains you make.
Tenants in common A form of joint property ownership. Each person owns a specific share (or percentage) of the property. When one owner dies, they can leave their share of the property to beneficiaries of their choice in their Will.
Term or bond account A savings account that invests in bonds for you. You make a single payment and then earn interest on top of that amount, which you will receive back after the fixed term of the investment expires.
The Crown Another term for the government.
Third-party top-up If your care fees are more than the local authority is prepared to pay, a relative or other third-party can agree to “top-up your fees” i.e. pay the additional costs.
Tracker products Some investment companies offer these products. They track the performance of a given stock market index, for example the FTSE 100 index, so you’ll make money if the stock market performs well, and lose out if it performs badly.
Trade association A group of companies operating in a particular area of industry to promote common interests and improvements, such as codes of conduct and lobbying for their membership.
Trust A legal method by which somebody owns property (trustee) but does so for the benefit of another person(s) (a beneficiary).
Trust forms Forms to complete when you’re creating a trust.
Trustee account A savings account typically deposited by someone who acts as the trustee for a beneficiary such as a child. The trustee controls the account until the money is payable to the named beneficiary.
Unit trusts Unit trusts are collective funds that allow individual investors to pool their money in a single fund. The advantages are that it allows them to spread their risk across a range of investments, have the benefit of a professional fund manager, and reducing the dealing costs. Unit trusts are open-ended in contrast to investment trusts, which are closed funds.
Unsecured pension A pension received through income drawdown. The fund is still invested while you draw income from it.
Valid Will A Will that meets all the requirements needed to make it recognised in law.
Volatility The stock market is volatile when share prices fluctuate rapidly. Volatility occurs if the market reacts to news on the markets, such as poor financial performance among companies or the state of the economy. This can make stock investments riskier but can also increase the chances of higher investment returns.
Wake A traditional mourning custom traditionally practised in Ireland.
Will A document that sets out in written form your wishes concerning the distribution of your property after your death. It may also specify your matters relating to the care of any dependent children and any funeral wishes you have. Provided it is valid [see above] it is legally enforceable.
Working Tax Credit For employed or self-employed people who meet certain criteria on working hours and income levels. See HM Revenue & Customs for more information www.taxcredits.inlandrevenue.gov.uk.
